A Hong Kong company may have foreign-sourced profits outside Hong Kong profits tax. Incorporation alone does not establish a zero-tax outcome. Start by explaining what your company will do and where the work that earns its income will happen.
Focus on the actual operations
The source analysis considers the profit-producing operations and their location. Customer nationality or invoice currency alone does not settle it. In goods trading, contract negotiation, conclusion and execution must be considered in context. [1]
A practical preparation example
Suppose you buy goods from a supplier and resell them to a customer in another country. Map the full process: who finds suppliers, negotiates, approves orders, holds stock and arranges shipment.
This is a way to present the facts, not a tax conclusion. Two companies selling the same product can organise their operations differently.
Records worth organising
- A plain-language description of the business and the people involved.
- Available customer and supplier contracts.
- Orders, invoices and corresponding payment records.
- Evidence showing how services or trading transactions actually took place.
- A consistent record of important business communications.
We suggest grouping these records by transaction. That is easier than reconstructing an entire year when someone asks for evidence.
Where FSIE fits
Specified foreign interest, dividends, disposal gains and intellectual-property income received in Hong Kong by an entity in a multinational group fall within the FSIE framework. Exemption requirements depend on the income category. Assess this separately from ordinary trading profits. [2]
Three questions before incorporation
- What exactly will the company invoice?
- Who will perform the work, and from which countries?
- Which documents will explain that organisation?
Bring us a practical description of your customers, suppliers and workflow. We can define the formation support and identify questions requiring tailored tax advice.
Build your company with Luminos
Formation is USD 1,490, including incorporation, constitutional documents, a registered address for one year, account application support, a client portal and WhatsApp support. Annual support is USD 990/year. Specific tax advice is scoped separately.